The answer to this question of what amounts to unfavourable treatment was recently considered in the Court of Appeal case of Andrew Williams v The Trustees of Swansea University Pension & another [2017] EWCA 1008.
The claimant in this case suffered from a disability that caused him to change from working full time to part time and then take ill-health retirement at the age of 38. Under his employer’s pension scheme, he was entitled to take his pension early, without any penalty for doing so but with the added benefit of receiving an enhanced pension that took into account the period of time from his actual retirement date to what would have been his normal retirement date.
Equality Act 2010
Mr Williams brought a claim under section 15 of the Equality Act 2010, alleging that he had been treated unfavourably by his employer because of something arising as a consequence of his disability, as his pension was calculated on the basis of his working part-time rather than full-time hours. His argument was that, since he had worked the part-time hours because of his disability, the term in his pension scheme that provided that the calculation would be based on the final pensionable salary amounted to unfavourable treatment.
A further argument was put forward that, had he suffered from a different disability that entitled him to ill-health retirement suddenly – for example a stroke or a heart attack – which would not have resulted in any part-time working, his final pensionable salary would have been on full-time hours and not, as it was in his case, part-time ones.
Unfavourable treatment
The Employment Tribunal held that the way in which the pension scheme was applied to Mr Williams amounted to unfavourable treatment, as it was found that his disability had caused him to have a lower pension than he would have done had his disability not caused him to be working part-time hours.
The tribunal found that, although the reasoning for the pension policy term was a legitimate aim, it was not a proportionate means of achieving it. The claim succeeded.
The respondent appealed the decision to the Employment Appeal Tribunal (EAT). Mr Justice Langstaff ruled that the tribunal had made an error of law, as Mr Williams had not been treated unfavourably. The main reasoning behind the decision was the finding that “treatment which is advantageous cannot be said to be ‘unfavourable’ merely because it is thought it could have been more advantageous or, put the other way round, because it is insufficiently advantageous.”
Early retirement pension
To put it simply, Mr Williams could not argue that he was treated unfavourably simply because a different category of disabled individuals would have received a more advantageous early retirement pension than he did.
Lord Justice Bean, who gave the only written judgment in the Court of Appeal, upheld the decision given by the EAT and for the same reasoning. The main difficulty with the argument that Mr Williams had put forward was the fact that the scheme had already operated advantageously for him because of his disability and he could not therefore argue it was unfavourable treatment because his disability had not arisen more suddenly.
The key point to take away is that the terms in pension schemes that give differing advantageous benefits to different types of disabled individuals would not amount to unfavourable treatment to the individual who finds themselves on the less advantageous end of the scale.
For more information on any of the issues raised in this article, please contact Kwadwo Boadu in the Leeds Employment team by emailing or calling [email protected] or calling 0113 368 8043.
